BMW charges dealers $500 per car to advertise?
 

I posted this over in the 'ask a dealer' forum too..

I am currenly in heavy negotiations with a BMW dealer to lease a new 328. The dealer gave me a break down of their numbers and how they calculated the lease payment. Everything checks out, except I think they are still asking too much for the car. MSRP is $45,395. They want $44,050 (capitalized cost). They got the car from another dealer and claim they paid $400 to get it to them, but the $44,050 includes that $400.

One of the things the dealer told me is they have to give up $500 for every car they sell back to BMW 'to help pay for advertising', etc. True or BS?

this is true, but the amount varies...

what they are talking about is training and MACO. training is a fixed 180.
MACO depends on the metro area the dealer is in.
In the NY tristate area, MACO is 300.
so combined 480 is added to invoice.

these are "legit" fees in the sense the dealer actually pays them.

for a 328i you should be able to do much better, at least 6% off MSRP (or about 500 over invoice)

I just got 150 over invoice on an F10. IF msrp on f30 is 45,395, you should be getting it for 43,000

I never pay MACO or training fee, if you stand your ground, they will give up. Another one that pisses me of is a lease acquisition fee. I am pretty sure dealers are not 100% honest about. They say its charged by BMWNA, but every dealer will have a different amount, i have seen it range from 650 to 900 or so. Just based on that they must be full of it. There might be an amount they have to pay to BMWFS, but there is also their profit that they tack on to it, which is obvious based on variying amounts

i agree, 7% off MSRP will usually get you close to invoice, which is what you should pay on a decent deal

Thanks guys. That's what I figured. Around 43,000 sounds right. Not sure about the $400 to get it though.... The story behind that is I told them exactly what I wanted and I had no problems ordering the car. They found this one (exactly what I wanted, no more, no less) at another dealer. I said okay, let's talk price before you go fetch, becuase if the price to go fetch is too much, I'll order the car. Next thing I know, they said they went ahead and got it from the other dealer. So, on 1 hand I appreciate what they did, but on the other, I am a little annoyed because I know its a tatic to make me feel pressued to buy it.

their reason was definately to pressure you. But now that they have the car, and you have not signed anything, you have the negotiating advantage.

What is MACO? I am in Charlotte NC. Wonder what it is here?

Below are more details on the current deal. Is a 328, jet black with sport line, premium pkg, lighting pkg, heated front seats, and enhanced BT & USB. Invoice (based on edmunds) for this car should be $41,755, which includes the $895 destination charge.

MSRP $45,395.00
Capitialized cost $44,050.00
Bank fee $925.00
DMV fee $69.00
Dealer Fee $549.00
Tax on Rebate $52.50 (3% of the $1,750 cash BMW FS is kicking in)
Total CAP Cost $45,593.00
Cap reduction $(1,750.00) (No $ down out of my pocket, just the rebates from BMW FS)
Net Cap cost $43,843.00

Residual $28,598.85
Term 36 months
Money Factor 0.0013

PMT - $533.15
I am ok with the money factor. I don't like the $549 'dealer fee', as I am a firm believer that is PURE PROFIT for the dealer. Its another 'add on' to milk another few hundred bucks off you. They way I have it figured, if invoice is $41,755 (8% off MSRP), then add $500 over, puts it to 42,255. Then, if they paid $400 to get it, makes it $42,655. So $43,000 would be nice for them. Again, that DOES NOT include their $549 'dealer fee'.

On this deal, if they drop the cap cost to $43,000, that makes the payment $501. I think I could live with that. But I may argue the $400 off since I didn't agree to that up front. It was presumptuous on their part. If they believe I will walk unless they eat that cost, it may work.

What you do you guys think? this is my first BMW lease. I have done a lot of research, but would love to hear more opinions.

true

amount here in Australian is $950

Its true. In socal I think maco is 380 + 180 training.

I've read that dealerships dont have to opt in to regional advertising but in LA all if them do

ok, yeah, thats a pure profit adder.
the training and maco should be part of the cap cost.
they are marking up the bank fee to the max.
also, you didnt ask them to get the car from another dealer... i would run from this dealer.


you could even do a deal with a board sponsor anywhere in the country and do performance center delivery (spartanburg south carolina, looks to be under 100 miles from where you are)

Dealer fee = pure profit.
The acquisition fee is $725. If they give you trouble about it, go to www.bmwusa.com, and show them - that's what BMW uses in every lease calculation.

I'm with the posters above - run from this dealer.

Correct. I knew that, but played dumb and asked about it. They admitted that to me as stated.

Yes yes! Just a short trip down interstate 85S. Been by it many times. But I didn't know this was possible. Please tell me more! How do I 'do a deal with a board sponsor'?...

Go to BMW configuration for the most accurate invoice cost:

http://www.bmwconfig.com/BmwConfig/Config.aspx

You should defnately cosider another dealer. Good selling price is probably invoice +500. Without any maco or training fees. So if your invoice is 41,800, you should be able to get it at 42,300 or so. Now, any incentives, like like cash back should reduce that amount, so less 1750 you should be offering 40,600. Honestly never heard of dealer fee in NY metro area. So based on 40,600 plus acq fee and DMV fee. It sounds like you have access to a lease calculator so calculate what your payment should be and stick with it. They had bad month in January, they need to move cars.
Regarding money factor, if you can put down multiple security deposits (i think currently up to 7 is allowed), do it, you get them back at the end. it will reduce the money factor and lower the payments. If you do max 7 deposit, the payment of about 500 should go down by 30 bucks or so (as a general rule), i dont know how much each deposit reduces money factor, but the info is out there, you can run the data in a lease calculator and see if its worth it for you.

just contact one of the dealers on the ask a dealer forum. adrian is probably closest to you, but the beauty of peformance center delivery is, any dealer in the us can sell you the car. you are lucky that it is so close to you.


if you can wait a little, you can have the car custom ordered to your spec, then delivered to spartanburg. that is the only caveat, it cant be a car already at a dealer, it has to be one ordered for delivery in spartanburg

you get to take delivery from any dealer in spartanburg, get some driving time/instruction on their closed track, overnite hotel accomodations, meal, etc, for free.
more info:
http://www.bmwusa.com/Standard/Conte...ehicledelivery

another thing to look into is multiple security deposits-- basically, you put down 7 security deposits (fully refundable) and it buys down your MF by 0.00049
unlike cap cost reduction, you get the money back at the end of the lease, or can roll it over into your next one. i've been rolling over basically the same MSD money with bmw since 2007, getting a "return" of about 10% in reduced interested every year.

Email Adrian Avila with your car configuration and mention you want to do PCD. 8-10 weeks after you order you pick your car up at the PC. Check out that form for a bunch of reviews of the experience.

+1 contact Adrian Avila at BMW of South Atlanta. He's pretty much no non-sense, and he'l do a great job setting the PCD for you.

Quite a chunk.

On another note, can you say: "Bull Pucky?"

Back on thread, the one and only thing that matters is the bottom line out-the-door. If interested in details, get Consumers Union's breakdown of current actual dealer cost and manufacturer's kickbacks/discounts - add up to 5% profit and there's a fair price.

I like to mention I contacted them, which I do, then make an offer. Hey, if they want to deal lower, I don't fight it. But I won't go up - when the salesman attempts to negotiate, I say OK, take my price to management - gotta go - will contact you [time & date] or if yes, call me at [cell number]. Eliminates much 'stew' time salesmen like to inflict on hapless punters.

Attachment 362666

Good luck t'ya!

Made a call to 'someone' and got some really useful informaiton. Thanks guys! Anyway, I am going to stop by the dealer on the way home this afternoon and see what they will do. In my expereince, they 'bend more' when you are inside the dealership. I'll post back and let you guys know how it goes!

I ordered my 328i xDrive yesterday - Sport (Black Sapphire/Black w/red leather - brushed aluminium/red accent), Premium, Technology, Cold, HK Radio and Alarm packages - MSRP 51,220, Paper Invoice $47,075 (+$300 Advertising & $180 training - these are not negotiable items); Actual dealer invoice $47555. The math: $51,220 - $2925 (Discount) - $1000 (BMW Finance Incentive) = $47295 or $260 less than dealer invoice and essentially 7.7% off of MSRP.

Could I have squeezed a little harder? Yes. However, I am trading in a 2011 Dodge Ram Laramie (completely loaded) w/23k miles. KBB/Edmunds put "Excellent" condition trade value between $28-$29.5k (I bought the truck for $37.5k 2 years ago, MSRP was $49k - bought it at the right time), I received $30.6k so it is one end versus the other. All in all, very happy with the deal and even more excited about the BMW. I looked at the A4 (have had 3 prior) and the C300 4Matic Sport (wife has a 2011 ML350). While I liked things about the A4/C300 (prefer Audi steering and price, prefer overall stance of C300), the BMW, in terms of packages/toys/free maintenance and general driving experience, was by far the best value.

So there you have it on pricing and if you are in the New England area, I recommend BMW of Peabody (ask for John Cotter) - I spent time with several local dealers, including the ones I bought the wife's ML from and none could touch this pricing in terms of the combination of trade/price.

Now I will watch the production of the car being on-line and follow it through until it hits the dealers lot. This will be a loooooooooooong 6-10 weeks for sure.

Well, they backed off and I got a deal I am happy with. I should be picking the car up either this afternoon or tomorrow! Can't wait to start enjoying my new 328! It going to feel so strange driving it after being behind the wheel of my '02 540 for the last 4 years....

So what items did they give on and what did you agree to pay? Acquisition fee, MF (base rate or marked up), MACO, Training fee, dealer fee?

so dealer fee is profit and the acq fee is legit?

Sent from my XT557 using Bimmer App

Yes. A dealer documentation fee of $75 - $150 is not particularly unreasonable. BMWFS charges the $725 acquisition fee and it is not negotiable. BMW allows dealers to mark up that fee by $200. Some dealers will negotiate on that, some will not.